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Qualcomm fined over hiring of Chinese officials' family members

Qualcomm has agreed to pay a $7.5 million fine to the US Securities and Exchange Commission (SEC) over allegations that it hired relatives of Chinese government officials who were in a position to decide whether to choose the company's products. 04 Mar 2016

The SEC found that Qualcomm gave full-time employment and internships to official's family members in an attempt to obtain or retain business in China. It internally referred to these as "must place" or "special hires", the SEC said.

Qualcomm also gave gifts, travel and entertainment to the employees of Chinese state-owned entity or government agencies, the SEC said.

Michele Wein Layne, director of the SEC’s Los Angeles regional office said: "Companies must effectively design and implement internal controls across all business operations to prevent FCPA violations, including its hiring practices."

"For more than a decade, Qualcomm went to extraordinary lengths to gain a business advantage with foreign officials deciding between Qualcomm’s technology and its competitors," she said.

Qualcomm agreed to pay the fine under the Foreign Corrupt Practices Act to resolve the matter "without admitting or denying the SEC's findings", it said.

The company has now improved its procedures and controls, it said, and will monitor its hiring process to identify any relationship between candidates and government agencies or state-owned entities. It will report periodically to the SEC on these efforts, it said.

Don Rosenberg, vice president of Qualcomm said: "Qualcomm is pleased to have put this matter behind us. We remain committed to ethical conduct and compliance with all laws and regulations, and will continue to be vigilant about FCPA compliance."